Supplier Diversity
Building a diverse supply base is an essential aspect of our commitment to supporting economic development, job creation and diversity in local communities. For 35 years, PG&E has embraced working with diverse suppliers and small businesses as a core part of our business strategy: supporting our mission to provide safe, reliable, affordable and clean energy.
Our Approach
PG&E actively works to bring diverse business enterprises (DBEs)—small businesses owned by women, minorities, service-disabled veterans and LGBT individuals—into our supply chain. We also connect DBEs with other organizations to help grow their business and empower them to succeed in today’s economy.
Our efforts include workshops and capacity-building training that, among other things, support safe, cybersecure, environmentally sustainable and thriving suppliers. All of this reflects how we prioritize diversity and believe in its power to improve our communities and enhance the quality and cost-effectiveness of our supply chain.
Championing Diverse Suppliers
PG&E honored by Minority Business News Magazine for supplier diversity
Minority Business News Magazine named PG&E Corporation Chairman, CEO and President Tony Earley to its 2015 Best of the Decade list. The award honors individuals who have been steadfast in their commitment to driving supply chain minority business development for a decade or more. PG&E was the only gas and electric provider to receive the award.
Within PG&E, we conduct formal and informal supplier diversity training for employees. This includes our group of Supplier Diversity Champions, who play a key role within their line of business by setting diversity goals, sharing best practices and monitoring progress, with the direct support of senior leadership. In addition, PG&E’s annual Supply Chain Responsibility Awards recognize employees who have made the largest impact on our diversity efforts.
More than 200 volunteer outreach ambassadors represent PG&E at various diverse business community events and share information about how to do business with PG&E.
Focusing on Small Businesses
For the past four years, PG&E has partnered with the U.S. Small Business Administration (SBA) to provide capacity-building training to the diverse small business community. SBA is the only federal agency dedicated to providing loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses.
PG&E also hosted many other workshops throughout the year to support small businesses, including a forum in which invited government representatives, community-based organizations and experts from the financial sector exchanged views on how small businesses can gain quicker and easier access to capital.
Encouraging Prime Suppliers to Participate in Supplier Diversity
PG&E encourages its prime suppliers—those with over $500,000 in annual business with PG&E—to submit a supplier diversity plan, set a supplier diversity performance goal, report on subcontracting with diverse suppliers and then detail their progress toward these goals. To support prime suppliers through this process, PG&E offers monthly training sessions and a new “Prime Supplier Academy” covering topics such as the value of supply chain responsibility and connecting with other businesses.
Strengthening Suppliers and Relationships
PG&E offers a wide variety of technical assistance and training programs to suppliers, many in conjunction with community organizations. These initiatives help diverse suppliers build their business acumen and include scholarship opportunities from the UCLA Management Development for Entrepreneurs Program and the University of Washington Minority Business Executive Program.
PG&E continues to sponsor educational scholarships that help suppliers manage supply chain risk and improve quality via International Organization for Standardization (ISO) certification. PG&E co-developed the first dual ISO web-based certification training for diverse suppliers.
Additionally, PG&E is encouraging mature diverse suppliers to explore and leverage new technologies by sponsoring their participation in the University of California Advanced Technology Management Institute, an executive training initiative.
PG&E’s Technical Assistance Program includes signature training offerings for diverse suppliers, with an emphasis in 2015 on cybersecurity:
- Diverse Suppliers are Cyber-Secure raises cybersecurity awareness and offers approaches that a small business can take to cost-effectively assess its vulnerabilities and reduce risks.
- Diverse Suppliers are Safe educates diverse suppliers on the importance of developing and improving their safety plans.
- Diverse Suppliers Go Green instructs participants on how to establish a sustainability program, reduce their environmental footprint and identify green business opportunities.
- Diverse Suppliers Go Global offers information and shares resources on how to evaluate and participate in the global marketplace.
2015 Milestones
In 2015, PG&E spent an all-time high of $2.5 billion with diverse suppliers, representing 44 percent of our total spending. This was the fourth consecutive year that PG&E exceeded $2 billion and the 10th consecutive year PG&E exceeded the CPUC’s goal of 21.5 percent.
In addition, PG&E’s supplier diversity subcontracting performance increased, with prime suppliers reporting more than $618.4 million in spending with DBEs, representing an 8.7 percent increase over the prior year.
Highlights from 2015 include:
- Strengthened training for prime suppliers. Through our new Prime Supplier Academy, we launched courses and programs for prime suppliers covering the role that supply chain diversity and sustainability play in corporate strategies and providing tools to support their efforts.
- Enhanced training on cybersecurity. One of the first of its kind in the country, PG&E’s Diverse Suppliers are Cyber-Secure training aims to strengthen the cybersecurity of small and diverse businesses. We enhanced the workshops with presentations from cybersecurity experts from the FBI and private sector.
- Helped small and diverse businesses address financial challenges. Part of our commitment to the White House SupplierPay Initiative, we offer a needs-based program that provides technical and financial assistance to small and diverse businesses with cash flow challenges. PG&E was the first gas and electric provider and one of the initial 26 companies to sign onto the SupplierPay Initiative.
- Increased focus on LGBT businesses. PG&E worked with the SBA and National Gay and Lesbian Chamber of Commerce to host the first LGBT Business Builder event, a session designed to remove barriers and increase access to strategic growth opportunities for LGBT-owned businesses. The workshop provided businesses with information on gaining third-party certification and how to take advantage of resources and information from the SBA for procurement contracts.
Measuring Progress
Earning recognition
In 2015, PG&E was recognized as one of America’s top corporations for our support of women’s business enterprises by the Women’s Business Enterprise National Council, was named to the U.S. Hispanic Chamber of Commerce’s Million Dollar Club for our investment in Hispanic-owned businesses and ranked in the top 40 companies for diversity by Black Enterprise Magazine, among other honors.
In 2015, PG&E spent $5.6 billion on products and services, an 8.7 percent increase of $448.3 million compared to the prior year. In comparison, at $2.5 billion, our diverse spending increased by 16.9 percent, or more than $356.8 million—significantly surpassing the general rate of increase in overall procurement.
Highlights include the following all-time highs in 2015:
- Minority business enterprises: $1.6 billion, a 16.6 percent increase
- Woman business enterprises: $723.1 million, a 16.3 percent increase
- Service-disabled veteran business enterprises: $154.6 million, a 23.6 percent increase
| Category | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|
| Total DBE $ (millions) | $1,611 | $2,052 | $2,317 | $2,112 | $2,468 |
| Total DBE % | 36.6% | 38.8% | 42.1% | 40.9% | 44.0% |
| Category | 2013 (%) | 2014 (%) | 2015 (%) |
|---|---|---|---|
| Grand Total Footnote 1 | 49.2 | 48.4 | 50.2 |
| Minority Men | 19.8 | 19.0 | 20.2 |
| Minority Women | 7.6 | 7.4 | 8.1 |
| Minority Business Enterprise | 27.4 | 26.4 | 28.4 |
| Women Business Enterprise (WBE) | 12.5 | 12.1 | 12.9 |
| Subtotal Women, Minority Business Enterprise (WMBE) | 39.8 | 38.5 | 41.3 |
| Service-Disabled-Veteran Business Enterprise (DVBE) | 2.3 | 2.4 | 2.8 |
| Total DBE | 42.1 | 40.9 | 44.0 |
| Utility Target | 38.5 | 40.0 | 41.0 |
| Non-Diverse Small Business Footnote 1 | 7.1 | 7.5 | 6.2 |
| 2013 ($ millions) | 2014 ($ millions) | 2015 ($ millions) | |
|---|---|---|---|
| Total Spend | 5,504 | 5,161 | 5,609 |
| Supplier Diversity Spend Footnote 1 | 2,317 | 2,112 | 2,468 |
| Non-Diverse Small Business Enterprise Spend | 393 | 385 | 349 |
| Total Diverse and Small Business Spend Footnote 1 | 2,710 | 2,497 | 2,818 |
- 1. Beginning with the 2015 reporting period, PG&E is reporting Small Business Enterprise results on a calendar-year basis. Previous-year reporting on small business enterprise spending aggregated partial year results (October through December of the previous year plus January through September of the reporting year). This accounts for the changes in percentages and spending totals reflected in the 2013 and 2014 data versus what was previously reported. Return to table
Looking Ahead
PG&E will continue to expand our supplier diversity program, outreach and support with a focus in 2016 that includes:
- Continuing to educate the small and diverse business community about the importance of having rigorous safety programs
- Promoting increased prime supplier support of PG&E’s supplier diversity initiatives through education and training
- Supporting executive training initiatives that encourage mature diverse businesses to consider competing for opportunities in emerging technology
- Providing scholarships for quality and environmental systems certification to help diverse businesses build the necessary practices for successful, scalable growth
- Focusing on LGBT business growth through targeted outreach and workshops on how to do business with PG&E